EDITOR'S LETTER

Merryn Somerset Webb

The year’s nice surprises

Some of what happened in 2014 was entirely expected. The eurozone did not magically cure itself . Growth in China slowed dramatically. The Scottish referendum result was a firm No. The US cut back on quantitative easing. The dollar strengthened. Japan announced an astounding programme of money printing and asset purchasing. The Japanese stockmarket rose.

London house prices finally peaked (and are falling in many parts of the capital). The public-sector deficit in the UK failed to fall much, and our seemingly very busy politicians failed absolutely to outline a genuine alternative to debt-financed public services. Marginal political parties gained traction everywhere as a result. Gold did very little.

But 2014 was also a year of financial surprises. No one foresaw the invasion of Ukraine, the sanctions, the collapse in the oil price and the consequent collapse in the rouble: as John Stepek notes, even the most extreme (and at the time ridiculous) forecasts for 2014 had the oil price falling to $80 a barrel.

Given our expectation of slowing growth in China, a fall of this size wouldn’t have totally surprised us. The price is now $60 – that did. Not quite so huge (so far) but still of interest are events in Cuba (where the capitalist genie is now surely completely out of the bottle) and in North Korea where the hacking of Sony seems to have led to the start of a mini-cyberwar. This could get interesting in 2015.